Is it Time to Sell Your Business? Answer These 5 Questions to Find Out
In this post, we’ll offer insight on how you can decide whether it is the right time for you to sell your business, or if you should pursue other alternatives. Answer the five questions below, and you’ll hopefully have a better idea on what you should do about the future of your business.
5 Questions You Should Answer Before Selling Your Business
1. Is Your Business Profitable?
If your business is flourishing, this could make it more desirable to an entrepreneur looking to purchase an already-established business. Think about it; it makes sense that a potential buyer would want to purchase a business making an influx of sales, instead of one that is just scraping by. You may be relishing the success of your business, but if selling is on your mind, it might be better to do when you’re seeing consistent profitability. Plus, if you receive multiple offers, you might be able to negotiate a higher selling price!
2. Are You Still Passionate About Your Business?
Perhaps you’re still enjoying your role as a business owner, but want to make more time for family and outside hobbies. If you’re not ready to say goodbye to your business, but need some balance, there are options you can pursue instead of selling. For instance, you could find a business partner to share equal responsibility with. Or, if that doesn’t seem like the right move for you, you could hire a manager to over-see your employees and other day-to-day responsibilities. And if you’re serious about selling, but might miss certain aspects of the business you’ve built, see if potential buyers would hire you as a consultant. This would allow you to be an active entrepreneur without having as much of a commitment.
On the flip side, if running your business is no longer enjoyable, and you’re in a position financially to move on, then it might be smart for you to sell. If you’re getting burnt out on the ups and downs of running a business, get out while you can. Forcing yourself to tolerate running a business when you’re tired of it might cause your personal and professional life to decline.
3. Is Your Health Declining?
Running a business can be demanding at any age. But if your role is taking a toll on your health, it might be time to take a step back. Investing in your physical health should be a priority, more so than your business’s longevity. Still, you don’t have to make a permanent decision. If you need to take a break to focus on your health, you could hire someone to manage operations during this period. Once you’re feeling refreshed, you could return to your typical role.
4. What is the State of Your Business’s Industry?
The industry you’re in can greatly affect whether you should sell your business. If your business’s industry is thriving, it might be a good time to take the leap of faith and sell your business. You’ll likely receive more money than you would if your business’s industry is struggling, or there isn’t major customer interest. Pay attention to industry trends, as it will benefit you if you consider selling.
5. Have You Already Received Offers?
Are fellow entrepreneurs showing interest in purchasing your business? If so, then this might be a good indicator that selling your business could be a smart financial decision. If you’re leaning towards selling, but are unsure of exactly when to make the move, you’re better off to sell when it is wanted by other entrepreneurs. Waiting until your business hits a slow period could make it a longer, more stressful selling process.
Should You Sell Your Business?
After spending months or years building your business, it isn’t surprising if you’re uncertain about whether to sell it. As we mentioned in this post, there are other alternatives to selling, such as finding a partner or hiring a manager who can takeover certain tasks. Still, it may be better for you and your loved ones if you sell your business. Or, you might have realized after reading this post that you’re not ready to say goodbye to your business just yet. Whatever decision you make, ensure that it is the right decision for you, your family and employees. Every entrepreneur is different, and there is no shame in doing what is right for you!
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.